Why Your Financial Advisor Is Just as Important as Your CPA When It Comes to Taxes
When most people think about taxes, their first call is to their CPA—and understandably so. CPAs are the ones who file your return, crunch the numbers, and hopefully deliver a refund. But here’s something not everyone realizes: by the time tax season rolls around, many of the decisions that could have lowered your tax bill are no longer on the table.
That’s where your financial advisor comes in.
A good financial advisor doesn’t replace your CPA—they complement them. While your CPA focuses on what’s already happened, your advisor is focused on what’s going to happen—and what you can do now to make sure it works in your favor.
The Power of Proactive Tax Planning
Your financial advisor is looking at your entire financial picture throughout the year—not just in March and April. And before December 31st, there’s still time to make meaningful changes that could reduce your tax liability, boost your retirement savings, or even increase what you can give to causes you care about.
Here are a few real-life examples:
- You’re sitting on a few investments that have lost value this year. Instead of just waiting it out, we might use a strategy called tax-loss harvesting to sell those at a loss and offset gains elsewhere—lowering your tax bill in the process.
- You're unsure about contributing to a Traditional vs. Roth IRA. We can walk you through the potential future tax consequences and help you decide what fits your current situation and long-term goals. Sometimes, the best move isn’t the obvious one.
- You want to give to charity, but you're not sure of the best way. Maybe you’re taking required minimum distributions from your IRA. Did you know you can give directly from your IRA to a charity and avoid paying income tax on that distribution? That’s something we’ll bring up before the year ends—because once the calendar flips, it’s too late.
What About Your CPA?
To be clear, your CPA is a key player in your financial life. They’re the ones who make sure everything is filed correctly, and they’ll often identify deductions or credits that apply based on the past year. They're great at analyzing and reporting what's already occurred—and making sure you're not paying more tax than you have to.
But if you're only talking to your CPA after January 1st, you're in a reactive position. At that point, there’s not much they can do beyond report what’s already done.
Why You Need Both
The best tax outcomes come when your financial advisor and CPA work as a team. At Otium Financial Planners, we take that collaboration seriously. We’ll bring ideas to the table before year-end, help you implement them, and then make sure your CPA has everything they need to report it correctly when tax time comes.
We’re not here just to help with investments—we’re here to help you live a full life, which includes making the most of your money by being proactive with tax planning.
The Bottom Line
If you’re only talking about taxes once a year when your return is due, you’re missing out on valuable opportunities. Your financial advisor can help you take action before the deadline—whether it’s optimizing retirement contributions, planning charitable giving, or coordinating with your CPA to make sure your plan is solid from all angles.
Let’s connect before the year ends and talk strategy. You might be surprised how much we can do now to help you save later.